Claude Wangen - stock.adobe.com

London named top five global retail colocation hub by Synergy Research Group

The latest quarterly colocation market tracker data from Synergy Research Group highlights differences between growth trends between retail and wholesale sectors, and the impact the hyperscale sector is having on both

London along with four other major international cities are collectively responsible for generating a quarter (25%) of the revenue generated by the global retail colocation market, claims Synergy Research Group.

The market watcher’s latest quarterly colocation market tracker data calls out Tokyo, New York, London, Washington and Shanghai as the world’s top five retail colocation hubs in revenue generating terms during the first quarter of 2019.

To highlight just how big of a hold these five have on the market, the next 15 largest hubs account for an additional 31% of the market, with North America emerging as the home to the highest number, with the region housing eight of the top 20 sites in total.

The North America region just pips Asia-Pacific to that total, as it is home to seven major hubs, while the region of Europe, Middle East and Africa (EMEA) has four and Latin America has one.

From an operator perspective, colocation giant Equinix is the one to beat, with it emerging as the greatest revenue generator out of all the other players in 14 of the top 20 metros.

John Dinsdale, chief analyst and research director at Synergy Research Group, said the data serves to highlight the differences in location strategies that exist between operators in the retail and wholesale colocation sectors,  

For example, in the wholesale market operator focus tends to be even more targeted on building out a presence within the major cities and economic hubs, with the top 20 metro areas responsible for generating 71% of the total worldwide revenue in these areas. From a retail perspective, that total stands at 56%. 

Furthermore, while none of the US cities featured among the highest growth hubs for retail colocation, on the wholesale side, the Washington, Northern Virginia and Silicon Valley areas are all growing at double-digit rates within the wholesale sector.

This is being driven, in part, by the demand for wholesale colocation space from the hyperscale cloud and internet service provider communities, which are also not averse to taking up space within retail facilities too, as Dinsdale pointed out.

“We continue to see robust demand for colocation across the board, with the standout regional growth numbers coming from APAC and the highest segment-level growth coming from colocation services for hyperscale operators,” he said.

“It is particularly noteworthy that the market remains concentrated around the most important economic hubs, reflecting the importance of proximity to major customers.

“Hyperscale operators often focus their own large datacentre builds away from the major metros, in areas where real estate prices and operating costs are much lower, so they too will increasingly rely on colocation providers to help target clients in key metros. The large metros will maintain their share of the colocation market over the coming years.”

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